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PRETORIA (Reuters) - Public funds were not spent on building South African President Jacob Zuma a house in his home village, state investigators said on Sunday in a report that sought to end one of the biggest scandals to hit Zuma before elections next year.

The report did say the government had spent 206 million rand (14.5 million pounds) on security upgrades and related costs at the president's private compound, and that this decision was based on an assessment of threats to Zuma.

Opposition politicians and media have said Zuma used up to 250 million rand of state funds to upgrade his private residence in his home village of Nkandla, in KwaZulu-Natal province.

Public Works Minister Thulas Nxesi, who led the so-called "Nkandlagate" inquiry, said there was no evidence that public money was spent on Zuma's home or on any house belonging to him.

However, the state paid 71 million rand for security upgrades at the complex and an additional 135 million rand was spent on "operational needs for state departments", including support staff, medical facilities and accommodation, Nxesi said.

The investigation by Nxesi's department, which was in charge of the upgrades, including installing bullet proof windows and security fences, did find irregularities in awarding tenders.

Nxesi told reporters that any officials at his department who were implicated would be investigated and held accountable.

The main opposition Democratic Alliance (DA) party called the report, which will not be made public, a "whitewash", and said the investigators seemed more focused on punishing low-ranking officials than holding Zuma responsible.

"There was absolutely no willingness on the part of government to admit to South Africans today that spending this amount on one man's home is ethically and lawfully wrong," said Lindiwe Mazibuko, the DA's parliamentary leader.

Justice minister Jeffrey Radebe said Zuma did not know the details of the security arrangements at his home.

"The president is not involved in this process and he is not expected to sign on anything as he has no authority with these security upgrades," he said.

The report was welcomed by the ruling ANC, which has been in power since the end of white minority rule in 1994.

Despite securing more than 60 percent of the vote in the last four democratic elections, the ANC is losing support to opposition parties who have accused it of graft, cronyism and failing to tackle widespread poverty and unemployment.

"The ANC believes that this report will bring to closure the issue of Nkandla that has generated speculative public opinion and has been used to incorrectly attack (the) President, the ANC and its government," a spokesman said.